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21 Jul 2022

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A European cloud is becoming increasingly popular not only with European governments but also with European companies

Europe is buzzing with ideas about creating its own cloud environment. The Germans were the first to create a cloud-based IT environment that strictly complies with German law, but recently France has also implemented its own cloud environment. Government agencies and organizations that are part of their countries' critical infrastructure were targeted by these projects. These projects were based on US technology stacks but run in data centers owned by local companies. Increasingly, European business customers are also showing interest in a European cloud.

BIT, a Dutch data center company, released a report this week showing that a third of Dutch IT executives would migrate their data and applications to European platforms. Similar trends are observed in countries like Belgium. This is a remarkable development since these countries have historically been open to using foreign technology to store and host crucial applications.

We are, however, at the very early stage of a migration to a European cloud, according to the research. The majority of respondents (62%) are confident that data is processed securely and in accordance with European guidelines at present. Almost one third of respondents (29%) believe that a European cloud platform is no more reliable than one from a non-European supplier. There are only a few respondents who are concerned that their company uses a cloud provider in the US (10%) or Asia (8%).

In particular, this last result is remarkable due to the different legal frameworks used by the EU and the US. Using US-owned data centers and cloud facilities may violate European laws for many European companies. The two parties tried to legally exchange privacy-related data under the Privacy Shield agreement in the past, but a European court blocked that arrangement in 2020. It was reported in March of this year that a revised agreement was being drafted. Currently, there is no legal framework that permits European privacy data to be stored in the US.

It has been a highly complex situation for European companies and even European government agencies. The fact that many IT executives continued to use non-European cloud stacks suggests that they were unaware of this legal situation. Due to its strict privacy laws, Germany was the first country to invest in a pure German solution. T-Systems, part of Dutch telecom giant Deutsche Telekom, decided to build a number of data centers in Germany that would run on a technology stack based on US technology - in this case, Microsoft Azure - hosted in German-owned data centers under German law with no non-German companies involved in hosting and maintaining the stack and the data stored.

In the EU, France initiated a discussion about data sovereignty that elevated this discussion to a new level. Two major cloud projects have already been launched in France this year that provide a fully French-owned data center and cloud environment.

Up until now, these projects have targeted government agencies. A study by the Dutch data center company BIT shows that even European enterprises are looking into the advantages of a European cloud environment. This concept has been around for quite some time. The European Sustainable Digital Infrastructure Alliance (SDIA) has been promoting the idea of European regional clouds for some time. This is a concept where the SDIA is researching the idea of a cloud environment built by local companies that pay taxes to local communities and provide local jobs. Large tech companies do not always fully integrate into the local economy. They also tend to build standardized data centers without optimizing their environments to a region's opportunities - for example - in terms of energy and water supplies. This contrasts with smaller and locally owned tech companies that are fully integrated into the community.

Migrating to a European cloud is far from a done deal for many European businesses. In BIT's research, a quarter of respondents (26%) are interested and curious about the benefits, progress, and, over time, the first user experiences of a European cloud platform. A similar percentage (24%) is monitoring developments because they would like to use a European cloud in their own business. However, four out of ten IT decision makers (41%) are unaware of the advantages of European cloud platforms.

Photo credit: Markus Spiske

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